QEP - Diamondback Energy: History Repeats Itself

• The latest Guidon and QEP additions continue a long history of acquisitions.
• Both deals have to be accretive because as the Energen combination showed, industry conditions can rapidly change.
• This does not make the Energen acquisition look bad because industry conditions can again change.
• However, current industry conditions make the new acreage more competitive for capital dollars than gassier acreage.
• The key is that Diamondback retains a lot of flexibility to accommodate different industry conditions while maintaining above average profitability.

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